Question
Cachita Haynes works as a currency speculator for Vatic Capital of Los Angeles. The current spot rate is 120.00/$. She must choose between the following
Cachita Haynes works as a currency speculator for Vatic Capital of Los Angeles. The current spot rate is 120.00/$. She must choose between the following 90-day options on the Japanese yen:
Option Strike Price Premium
Put on yen $0.00800/ $0.00003/
Call on yen $0.00800/ $0.00046/
What is Cachita's breakeven price to buy a call?
a. 0.00503 b. 0.005046 c. 0.00603 d. 0.00846 e. 0.00803 f. 0.007970 in (dollar/yen)
What is Cachita's breakeven price to buy a put?
a. 0.00503 b. 0.005046 c. 0.00603 d. 0.00846 e. 0.00803 f. 0.007970 in (dollar/yen)
When Cachita buys a put and the spot rate is 120.00/$, the gain of loss per yes is $_______________
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